Former Wayne County Assistant County Executive Sentenced for Conspiracy to Commit Honest Services Fraud

Former Wayne County Assistant County Executive Sentenced for Conspiracy to Commit Honest Services Fraud

Former Wayne County Assistant County Executive Michael Grundy was sentenced today to 90 months in prison for conspiracy to commit honest services fraud in connection with his position as executive director of HealthChoice of Michigan, U.S. Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation, and Acting Special Agent in Charge Jarod Koopman, Internal Revenue Service—Criminal Investigation.

In his guilty plea, Grundy, 42, of Detroit, admitted that he had caused the accountant of HealthChoice to wire transfer $400,000 to a company called Medtrix, Grundy falsely represented that the payment was made pursuant to an existing contract to develop and implement an electronic medical records (“EMR”) system for HealthChoice medical providers. In fact, however, the contract was not executed until the day the wire transfer was made, and was not approved by the HealthChoice Board of Directors. Further, Medtrix never created or obtained any EMR programming, and an EMR system that was developed by another company was already being offered to HealthChoice networks and medical providers.

Medtrix owner and co-conspirator Keith Griffin of Camel, Indiana, pleaded guilty to the wire fraud scheme and testified during Grundy’s nine-day sentencing hearing. Griffin admitted that Grundy used his position as Executive Director of HealthChoice to authorize fraudulent payments to Medtrix and Advertise Me, also owned by Griffin. Griffin admitted that he kicked back substantial portions of those payments to Grundy.

The court also considered evidence that Grundy extorted a contractor, causing that contractor to send payments to Advertise Me and Medtrix, and that portions of those payments were kicked back to Grundy.

In addition to his custodial sentence, Grundy will forfeit real property located at 19604 Shrewsbury Road, Detroit, a 2011 Jeep Wrangler, and $7,755 in currency, assets that were derived from proceeds traceable to the fraud.

United States Attorney McQuade said, “The citizens of Wayne County deserve honest services from their public officials. It is particularly offensive when corruption comes from officials entrusted to promote health and welfare. We will continue to prosecute public officials who enrich themselves instead of serve the people.”

“IRS-CI is committed to investigating those public officials that choose to steal funds earmarked for public programs in order to enrich themselves,” said IRS-CI Special Agent in Charge Jarod J. Koopman.

The case was investigated by agents of the FBI and IRS. This case is being prosecuted by Assistant United States Attorneys Elizabeth A. Stafford and Gjon Juncaj.